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I’m so glad to be back home here in New York. It’s an incredible honor to be speaking after Mayor Bloomberg today. And I’m sure the Mayor will be pleased to know that I plan to return and speak in
IPO
SEC Investor Advocate Discusses Mandatory Arbitration as Illusory Remedy for Shareholders
Today [February 24, 2018] is a special day for the [Securities and Exchange Commission’s] Office of the Investor Advocate.[1] I started this job four years ago today, and because I am the first Investor Advocate that is also the …
Optimal Disclosure and Litigation Rules around IPOs and SEOs
In recent years, there have been a number of reforms to the legal and regulatory framework governing disclosures and litigation around initial public offerings (IPOs) and seasoned equity offerings (SEOs). The most prominent of these are the JOBS Act of …
The Spotify Listing: Can an “Underwriter-less” IPO Attract Other Unicorns?
Press reports indicate that Spotify, the music streaming company, is planning an initial public offering in March or April of this year, and that it plans to use a novel “direct listing” approach that has not previously been used at …
Debevoise & Plimpton Discusses FCA’s Reforms to UK’s IPO Process
The UK Financial Conduct Authority (the “FCA”) has published changes to the Conduct of Business sourcebook (“COBS”) to boost the transparency of the IPO process and tackle conflicts of interest that may arise from the interaction between an issuer and …
How Do Small Issuers React to Innovation in Securities Offering Methods?
In 2015 the U.S. Securities and Exchange Commission adopted amendments that significantly expanded Regulation A, a previously little used provision that allows companies to conduct small public securities offerings without having to comply with all the requirements applicable to traditional …
Ropes & Gray Discusses U.S. Treasury’s Report on Capital Markets
On Friday, October 6, the Treasury Department issued a report to the President on streamlining and reforming U.S. capital market regulation. The report covers recommendations on nine topics across the U.S. financial regulatory system. One of the topics – Access …
Davis Polk Explains How New Revenue Recognition Rules May Slow 2018 Offerings
New revenue recognition rules (ASC 606 and IFRS 15) are required to be adopted by most public companies starting January 1, 2018 and most private companies starting January 1, 2019. These changes are widely regarded as some of the most …
Another Reason Why Companies Avoid IPOs
In a recent New York Times article, Steven Davidoff Solomon listed several possible explanations for a significant decline in the number of initial public offerings (IPOs). Among the most interesting was that there are many large and successful high-tech …
How Dual Class Shares in IPOs Can Create Value
The shareholder empowerment movement (the “movement”), driven primarily by public pension funds and union-related funds with over $3 billion in assets, has renewed its effort to eliminate, restrict, or at least discourage companies from creating dual class share structures in …
Benefit Corporations and Public Markets
Benefit corporations are a new legal form of business association created to support social enterprises. Over half of U.S. states have adopted a benefit corporation statute, and over 2,000 companies have chosen the form. So far, almost all of these …
The Agency Costs of Teamwork
It is common wisdom among transactional lawyers that good teamwork results in smoother deals and better service for their clients. Perhaps for this reason, capital-markets practices frequently tout their teamwork skills as a source of value for clients, especially in …
Can Investors Anticipate Post-IPO Mergers and Acquisitions?
Of the nearly 6,000 U.S. firms that conducted initial public offerings between 1980 and 2008, 38 percent became merger bidders within three years after the IPO and 12 percent became takeover targets. It is important that investors understand these developments, …
Fool’s Gold? Equity Compensation and the Mature Startup
The Silicon Valley ecosystem has changed profoundly since the dizzying heights of the dot-com era. Consider two of that era’s iconic companies: Yahoo! and eBay. At the time of their IPOs, both of these companies were mere infants by today’s …
How Venture Capital Improves the Market Value of Firms that Go Public
It is well established that venture capitalists can improve the product market value — the quality of projects and employees — at the private firms they invest in, either by making the firms more efficient (Chemmanur, Krishnan, and Nandy (2011)) …
Venturing Beyond the IPO: Venture Capitalists’ Investments in Newly Public Firms
A wide body of literature emphasizes that venture capitalists focus on young private companies, generally in high-tech industries. However, contrary to this notion, we find that 29% of the firms that were backed by VCs prior to the IPO received …
The Perils, Protections and Proliferation of Pre-IPO Options: Expanding the 4(1½) Exception to Employee Options
Many would describe the era we are living in as a “startup bubble.” Not only has the number of startup companies increased dramatically, but many startups have also achieved record-breaking valuations. Alibaba, an e-commerce site, recently went public at a …
IPO Pricing as a Function of your Investment Banks’ Past Mistakes: The Case of Facebook
On May 18, 2012 Facebook (FB) held its initial public offering (IPO) on NASDAQ, raising over $16 billion making it one of the largest IPOs in history. To the surprise of many investors, there was almost no underpricing, as the …
McDermott Will & Emery discusses ISS Issuance of Acceptable Parameters for Proxy Access Provisions
Institutional Shareholder Services Inc. (ISS) recently issued, in the form of Frequently Asked Questions, a further update to its 2016 proxy voting guidelines to outline the types of management-sponsored proxy access provisions that ISS will deem responsive to shareholder-supported …
Shearman & Sterling on FINRA’s FAQs Regarding Research Conflicts of Interest in the Offering Process
In late May, FINRA published a set of Frequently Asked Questions regarding FINRA’s equity research rule,1 which addresses interactions between issuers, research analysts and investment bankers in various stages of the offering process (the “Research FAQs” or the “FAQs”).…